Oscar Lopez Rivera attends a rally in his honor in San Juan, Puerto Rico, last month.
Photograph: Alvin Baez/Reuters

A Puerto Rican nationalist recently freed from prison has agreed to step aside from any formal role in New York City’s Puerto Rican Day parade, Mayor Bill de Blasio said on Thursday.

“Oscar Lopez Rivera agreeing to step aside from any formal role in the parade is a critical step forward in refocusing our city’s attention on the more important issues facing Puerto Rico,” the Democratic mayor said in a statement.

Parade organizers had planned to honor Lopez Rivera, a member of the Armed Forces of National Liberation, or FALN, which claimed responsibility for more than 100 bombings in the 1970s and 1980s.

Lopez Rivera was not charged with carrying out any of the bombings himself, but he was convicted of charges including seditious conspiracy and served more than 35 years in prison before his sentence was commuted by Barack Obama in January.

The parade’s decision to honor Lopez prompted sponsors including Coca-Cola, JetBlue and AT&T to drop out of the 11 June march up Fifth Avenue. The Democratic governor, Andrew Cuomo, also said he would not be marching.

Hispanic societies in the New York fire and police departments also said they would not be sending delegations this year, and the police commissioner said he wouldn’t march. Law enforcement officers were among those injured in the FALN blasts.

It was not clear late Thursday whether Lopez Rivera still planned to march in the parade or what role, if any, his presence would constitute. A message left with the mayor’s office wasn’t immediately returned.

The parade’s board of directors issued a statement saying they looked forward to marching with Lopez Rivera “not as an honoree but as a humble Puerto Rican and grandfather”.

Parade organizers have said they stand by their decision to honor Lopez Rivera as “Procer de la Libertad” – National Freedom Hero.

The 74-year-old Lopez Rivera has thousands of supporters who see him as a political prisoner, jailed for seeking independence for Puerto Rico, a US territory.

De Blasio will still march, and more than 30 city lawmakers, including the city council speaker, Melissa Mark-Viverito, who was born in Puerto Rico, said they supported the decision to honor Lopez Rivera.

“The parade has always been about Puerto Rico and Puerto Ricans, not any one participant,” De Blasio said. “Unfortunately, the parade and the plight of Puerto Rico have been overshadowed by needless controversy.”